Director disqualified for £1.7 million landbanking scam that left customers with virtually worthless land

A company director who ran an extensive landbanking scam through his three companies that misled members of the public into parting with at least £1.7 million for small plots of land of little value has been disqualified from being a company director for 14 years.

A company director who ran an extensive landbanking scam through his three companies that misled members of the public into parting with at least £1.7 million for small plots of land of little value has been disqualified from being a company director for 14 years.

Eren Metcalfe, formerly known as Eren Cemal Ibrahim, was the sole director of Natural Wealth Solutions Ltd, Proctor Capital Ltd and Land Security Management Ltd, three companies that were wound up in the public interest by the Secretary of State for Business, Innovation and Skills, after an investigation carried out by Live Investigations, part of the Insolvency Service, following complaints by members of the public.

Examination of the companies’ affairs by the Official Receiver after the winding up orders showed that, between them, Natural Wealth Solutions Ltd and Proctor Capital Ltd received at least £1.7 million, the proceeds of a land banking scheme which misled members of the public in order to induce them to buy plots of land as an investment, when it was not.

The companies’ salespeople represented the plots of land that they marketed as being suitable for development and having a realistic prospect of obtaining planning permission. However, the land sold to customers had little, if any, value for development purposes and was sold at mark ups of between 18 and 63 times the purchase price per acre. None of the land had planning permission, and had little prospect of obtaining it. Neither Mr Metcalfe nor the staff had any expertise in assessing land, and made no enquiries as to the likelihood of planning permission being granted.

Commenting on the disqualifications Paul Titherington, Official Receiver at The Insolvency Service’s Public Interest Unit, said:

As with all the other land banking companies that the Official Receiver has dealt with over many years, these companies have brought misery to unsuspecting members of the public, who were persuaded to part with their savings in exchange for virtually worthless plots of land. In over 7 years of dealing with land banking scams I have not seen a single piece of land that has been sold in this way actually go on to obtain planning permission. Every single customer has lost their money in what was a horrendous investment.

Whilst land can obviously be a secure investment, the way in which these companies sold it ultimately means there was no viable exit strategy for their so called investment.

Sites owned by the companies at Rubery, West Midlands and Stokenchurch, Buckinghamshire are all within Green Belt Landscape Protection Areas. The site at Stokenchurch is also within the Chilterns Area of Outstanding Natural Beauty. There is therefore no realistic possibility of planning permission being granted at any of the sites. Mr Metcalfe knew about these restrictions when each site was purchased.

When it began trading, Natural Wealth Solutions Ltd sold plots of land belonging to other companies on a commission basis, using a similar approach. Of those plots of land, at least two were in Green Belt, and another was in an Area of Outstanding Natural Beauty. Mr Metcalfe did not make enquiries about the likelihood of obtaining planning permission at those locations either.

The companies did not do anything to add value to the land, but this did not stop them selling plots at substantial mark ups above the price that had been paid. At the companies’ various sites at Rubery and Stokenchurch, customers were charged between 18.2 and 63 times the purchase price per acre of the site. Mr Metcalfe has not provided any independent valuation or other professional advice to justify such levels of mark up.

Natural Wealth Solutions Ltd and Proctor Capital Ltd sold land belonging to Land Security Management Ltd and Proctor Capital Ltd at the following locations:
* land lying to the south west of New Inns Lane, Rubery, Rednal, Birmingham
* land lying to the north of the A40, Stokenchurch, High Wycombe
* land at Waseley Hill Farm, Gunner Lane, Rubery, Birmingham B45 9AE

In addition, when it began trading Natural Wealth Consultants Ltd sold land belonging to other unconnected companies [i.e. those of which Mr Metcalfe was not a director] at other locations on a commission basis. These included:

land off Shelley Road, Brentwood in Essex; at Holwood Farm, Keston in Kent; and near Folkestone in Kent – sold on behalf of Vinci Trading Ltd

land at Riseley in Bedfordshire; Barby in Northamptonshire; Brentwood in Essex; and at Keston and Folkestone in Kent - sold on behalf of European Property Investments (UK) Limited
Vinci Trading Ltd and European Property Investments (UK) Ltd are also both companies that have been wound up on petitions presented in the public interest.

The investigation also uncovered deficiencies in the books and records of all the companies, including:
* there is little documentation to explain the purpose of sums totalling £843,097 paid from the bank account of Natural Wealth Consultants Ltd between 15 March 2010 and 20 May 2011

similarly, there is little documentation to explain the purpose of sums totalling £460,260 paid from the bank account of Proctor Capital Ltd between 18 March 2011 and 9 January 2012

there is no documentation to explain the purpose of sums totalling £311,705 paid from the bank account of Land Security Management Ltd between 15 March 2010 and 20 May 2011

After 14 July 2011, at Mr Metcalfe’s instruction, the solicitor doing conveyancing work for Proctor Capital Ltd did not make any further payments to the company’s bank account of the proceeds of sales that were due to Proctor Capital Ltd.

In the period between 21 July 2011 and 12 September 2011 the solicitor made payments totalling £424,507 from his client account on behalf of Proctor Capital Ltd. Mr Metcalfe instructed the solicitor how to allocate those payments. The company records delivered up did not contain any documentation to record or explain any of these payments.

Between 7 January 2010 and 31 August 2011 Mr Metcalfe caused payments totalling at least £186,658.07 to be made to himself which were not recorded in the PAYE scheme at the time he received them.

Notes to editors

Natural Wealth Consultants Limited (CRO No. O7118654) was incorporated on 7 January 2010 and went into liquidation on 23 July 2013.

Land Security Management Limited (CRO No. O7438764) was incorporated on 12 November 2010 and went into liquidation on 23 July 2013.

Proctor Capital Limited was incorporated on 10 December 2010 and went into liquidation on 23 July 2013
.
Eren Metcalfe gave an undertaking to the Secretary of State for Business, Innovation and Skills not to be a director for 14 years. The disqualification commences on 21 November 2014.

Mr Metcalfe is of Woodford Green, Greater London and his date of birth is 2 May 1988. He was formerly known as Eren Cemal Ibrahim.

A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:

act as a director of a company;

take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership;

act as an insolvency practitioner; or

be a receiver of a company’s property.

In addition many other restrictions are placed on disqualified directors by other regulations.

Disqualification undertakings:
Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings.

The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK. In addition, the agency authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.

Help us improve GOV.UK

Help us improve GOV.UK

To help us improve GOV.UK, we’d like to know more about your visit today. We’ll send you a link to a feedback form. It will take only 2 minutes to fill in. Don’t worry we won’t send you spam or share your email address with anyone.